Texas will add 2 million barrels of oil per day in 2019 and more in 2020

Texas Permian oil producers will add three pipelines and 2 million barrels of oil a day.

A few months ago it was believed that U.S. oil production was going to plateau from mid-2018 to 2020. However, August saw the largest annual increase in U.S. oil production in 98 years, according to government data. The American energy industry added, in crude and other oil liquids, nearly 3 million barrels, roughly the equivalent of what Kuwait pumps, than it did in the same month in 2017. Total output of 15.9 million barrels a day was more than Russia or Saudi Arabia.

Bloomberg reports on the status of new oil pipelines and EIA oil production reports.

Rail Cars and Pipelines

The growth was possible because oil traders decided not to be stymied by the dearth of pipelines. They used rail cars and even trucks to ship barrels out of the region. Pipeline companies unexpectedly increased capacity, in part because they added chemicals known as drag reduction agents to increase flow. A new pipeline came online earlier than anticipated. Three more pipelines are expected between August and December in 2019. Texas Oil production is poised to soar.

Permian companies are drilling wells but are not completing them. These oil wells are becoming a reservoir of ready-to-tap production once the new Gray Oak, Cactus II and Epic pipelines come online.

By the end of 2019, total U.S. oil production — including so-called natural gas liquids used in the petrochemical industry — is expected to rise to 17.4 million barrels a day, according to the U.S. Energy Information Administration. At that level, American net imports of petroleum will fall in December 2019 to 320,000 barrels a day.

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